Airlines and travel sites tussle over booking flights

By Charisse Jones
January 31, 2011

More than 125 of the nation's biggest travel organizations and agencies, including online travel giant Expedia, have formed a coalition that is taking aim at a new booking system, preferred by American Airlines, that challenges the way most major airlines make their fares available to the public.

American says that its new, direct link will better inform travelers of services it offers for a fee, such as priority boarding, and also pare the airline's costs. But the newly formed Open Allies for Airfare Transparency and other critics argue that bypassing the systems that pool fare information from multiple airlines will make it harder for the public to find the best deals, or even the best routes, to their destinations.

"This is not a coalition directed at any one airline," says Andrew Weinstein, director of Open Allies. "It's a coalition concerned about the possibility that airlines will build systems that circumvent the central distribution system. And if they do that, from the consumer and travel manager perspective, it becomes potentially impossible for them to be able to compare fares on a side-by-side basis."

American Airlines is at the center of the storm. The carrier stopped listing its flights on Orbitz as of Dec. 21, when the online travel site would not adopt the new system. Less than two weeks later, Expedia, the largest online travel company in the world, stopped displaying American's flights, saying the carrier's new booking pipeline was questionable, would be costly to implement and would hinder travel agents' ability to offer fliers the best choice.

American also got into a dispute with Sabre, the biggest of the centralized systems that funnel fare information to travel agents. After Sabre began placing American's flights lower in its display to protest the system switch, American filed a lawsuit in Texas state court and on Jan. 10 won a judgment that temporarily barred Sabre from giving American's flights lower priority.

Last Monday, the two sides said they're putting their legal fight on hold until June as they try to iron out their differences.

Consumers 'may suffer'

The tussles come at a time when airlines are reaping billions of dollars in extra fees for everything from checking a bag to accessing the Internet in-flight. Some online travel agents and other experts say that as airlines ramp up the extras they sell, they're increasingly trying to steer more passengers to their own websites to cut down on the fees they pay to middlemen.

Southwest has for years offered its fares only on its website. But if other carriers follow suit, "It's the consumer who may suffer," says George Hobica of Airfarewatchdog.com. "They'll have to search more to find the lowest fares and best schedules and may end up having to book separate flights on separate airlines to save time or money."

American, which generates more than $1 billion a year in revenue through online travel companies, insists it isn't trying to direct travelers away from other travel websites to its own. It says the new system will allow the airline to tailor its offerings to a flier's tastes, while still permitting travel agents to compare American's fares with other airlines'.

"We continue to believe that our direct-connect solutions will more efficiently distribute our products, empower agencies with new tools and benefit consumers as well with more choices and competitive options," says Ryan Mikolasik, an American Airlines spokesman. "Arguments that these solutions are not transparent ... are completely groundless."

American announced on Jan. 18 that Priceline has agreed to use its new system.

The National Business Travel Association says a new poll of 244 corporate travel buyers found that 72% thought the new system would negatively affect the corporate travel industry — airlines' most lucrative clients — while 59% said they would be "very concerned" if other carriers made the switch.

The concerns of agents and corporate travel managers over whether they'll be able to continue to easily access and compare ticket prices dovetail with another complaint.

Sharing information

Most airlines don't share information about the extra charges and services they sell with the centralized reservation systems that agents rely on, making it difficult for passengers to know the full cost of their trips until right before they buy tickets or are ready to take off.

"The airlines, largely, do (not) make that data available to travel agents, as they want customers to use their own Web portals vs. independent distributors. Or, worse, consumers find out about these fees at the airport," says Brian Hoyt, spokesman for Orbitz Worldwide. "We are ready, willing and able to help the airlines merchandize these ancillary fees to our customers."

The Transportation Department is considering a rule that would require airlines to share information about their charges for extra services through the centralized booking systems. It could make a final decision as early as April.

Meanwhile, some airlines in recent days have announced that they're already moving in that direction, while also trumpeting their allegiance to the centralized reservation systems.

Expedia will begin presenting US Airways' passengers the option of paying extra for a window or aisle seat in the front of the economy cabin. Initially, passengers booking a trip on Expedia will be linked to the US Airways website to buy the upgraded seats. But the two companies are working to create a way for customers to buy directly through Expedia, says Valerie Wunder, a US Airways spokeswoman.

Virgin America announced last week that it will begin selling some of its extra services through Sabre's pipeline, possibly by year's end.

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Airlines and travel sites tussle over booking flights

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